Issues when a SMSF Invests in a Private Company - Affinity Accounting Plus
One of the main advantages of using self-managed superannuation fund SMSF for retirement savings is flexibility in how it invests its money. We are often asked whether a SMSF can invest in a business of a related party. Before considering such an investment it is worth remembering that your superannuation savings are intended to provide you with an income in retirement.
Article :: SMSFs owning shares in private companies
Because of this, investments should normally be relatively conservative. If the SMSF trustees are comfortable with the risk profile of the investment, there are a number of regulatory issues to be addressed, including:. A range of factors need to be considered in this regard, including the value of the shares, the cost to acquire them, the rate of dividend and whether the company paid dividends to others at the same rate.
Penalties for breaches of the rules can be severe.
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Can a self-managed superannuation fund invest in a private company? If the SMSF trustees are comfortable with the risk profile of the investment, there are a number of regulatory issues to be addressed, including: This essentially requires that any investment must have the sole purpose of providing retirement income or death benefits.
The investment has to satisfy the related party rules.
Business Succession Factsheet: Can a self managed superannuation fund invest in a private entity that carries on a business? - HopgoodGanim Lawyers
The investment must be allowed under the SMSF trust deed, and be in accordance with its investment strategy. Look before you leap — Super Changes from 1 July International Insights — May Newsletter May Newsletter Year end tax planning — what does your SMSF administrator need to know?
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